Chinese subcontractors ofApple temporarily suspend their production due to lack of energy

by Kelvin
Chinese subcontractors ofApple temporarily suspend their production due to lack of energy

Several Chinese subcontractors ofApple and Tesla had to halt production of components on Beijing’s orders, reports the Nikkei. Some Chinese factories of Eson Precision Engineering, a subsidiary of Foxconn, Unimicron Technology (key supplier ofApple), and Concraft Holding, which supplies components for iPhone speakers, will cease production for a few days.

Activity continues at Pegatron and Foxconn, who assemble these components, but they could be affected if this paralysis were to last. The central government wants to reduce the country’s carbon emissions, in a context of sharp increase in consumption (accompanied, to make matters worse, by a substantial increase in energy prices).

Beijing is taking the hard way: the government would specifically target provinces, such as Liaoning, Jilin or Heilongjiang which have failed to achieve their objectives of reducing energy consumption. Companies have no other choice but to go on layoff: electricity is cut off during the day, which effectively prevents any production.

  

President Xi Jinping pledged last week to the United Nations that China would not build coal-fired power plants in the future and that it would control its CO2 emissions. Instead, the country will focus on green energy, but the emerging transition period will cause difficulties for businesses.

It turns out to be the worst for Apple, Tesla and for all industries already affected by component shortages. A situation that will reduce MacBook shipments in the first half of next year, according to Ming-Chi Kuo.